The cryptocurrency mining sector has seen a significant boost in economic performance in December, with mining profitability hitting its highest levels in seven months. The hashprice, a crucial metric for the daily profitability of publicly listed Wall Street Bitcoin Miners, has risen by 5% since the end of November.
In early December, daily block reward revenue reached $57,300 per exahash per second (EH/s), marking a seven-month peak. Despite this increase, it still remains 40% below pre-halving levels. The network’s total hashrate has also grown by 6% this month, averaging 773 EH/s.
The surge in major cryptocurrencies has played a vital role in this ongoing rally. Bitcoin has seen a 40% increase since the beginning of November, reaching historic highs above $107,000. Additionally, altcoins like the BGB utility token have surged by 120% in December alone.
According to analysts Reginald Smith and Charles Pearce from JPMorgan, miners earned about $57,300 in daily block reward revenue per EH/s in the first two weeks of December. The Wall Street Bitcoin miners from the US have strengthened their market position significantly, with their combined hashrate increasing by 94% year-to-date to 222 EH/s. These miners now control around 29% of the global network, despite experiencing a $1.5 billion decline in aggregate market capitalization in the first two weeks of December.
Bitcoin miners have been actively reducing their holdings, selling over 140,000 BTC (worth $13.72 billion) in December. This has decreased their total holdings from 2.08 million to 1.95 million BTC. Despite the significant sell-off, Bitcoin’s price has remained resilient, with only minor pullbacks.
Mining revenue has also reached impressive levels, with daily earnings reaching around $50 million, the highest since April’s peak of nearly $100 million. However, the increased mining difficulty, now at 106T compared to April’s 85T, has posed additional challenges for miners.
The primary reason behind the large amounts of BTC selling by miners in December appears to be covering regular operational expenses like electricity bills and other running costs. The selling has been gradual and strategic, indicating a calculated approach to sustaining operations.
While some miners are selling their Bitcoins, others are opting to issue bonds or other debt instruments to raise additional funds and bolster their BTC reserves. For instance, Riot Platform recently purchased an additional 667 BTC at an average price of $101,135, increasing its holdings to 17,429 BTC.
In comparison, El Salvador, the first country to adopt BTC as its official legal tender, has accumulated just under 6,000 BTC. The cryptocurrency mining sector continues to see growth and adaptation to changing market conditions, with miners adjusting their strategies to maximize profits and navigate challenges effectively.